|12 June, 2019

Dubai International Financial Centre Enacts New Employment Law

New Employment Law to come into effect on 28 August 2019

  • Revised provisions include statutory paternity leave for all new fathers
  • Significant penalties introduced for violations of conditions of employment, visa and residency sponsorship

Government of Dubai Media Office: In his capacity as Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, enacted a new DIFC Employment Law, Law No. 2 of 2019, the Dubai International Financial Centre (DIFC), the leading international financial hub in the Middle East, Africa and South Asia (MEASA) region, has announced.

The newly-enacted law compliments the DIFC’s commitment to international best practice, with the Employment Law addressing key issues such as paternity leave, sick pay and end-of-service settlements.

His Excellency Essa Kazim, Governor of DIFC, said: “The DIFC Employment Law enhancements are integral to creating an attractive environment for the almost 24,000-strong workforce based in the DIFC to thrive, while protecting and balancing the interests of both employers and employees.”

The new Employment Law, which will come into effect on 28 August 2019, clarifies the application of DIFC’s employment regime to employers and employees, including seconded, part-time and short-term employees. The law centres around the necessity to balance the needs of employers and employees in the DIFC while maintaining a robust framework of employment standards that contribute to the success of the Centre.

Employer-focused provisions include expansion of employee duties, reduction of the statutory sick pay, limiting the application of mandatory late penalty payments for end-of-service settlements and recognising settlement agreements between employers and employees. Employee-focussed provisions include the introduction of five days of paternity leave and penalties for discrimination. Penalties have also been introduced to ensure adherence to basic conditions of employment, visa and residency sponsorship.

The new law was subject to substantial research and global benchmarking, as well as thorough public consultation, which helped shape the law to ensure that the DIFC remains the most sophisticated and business-friendly Common Law jurisdiction in the region.

The new law can be viewed at: www.difc.ae/business/laws-regulations/legal-database 

Additionally, the new Insolvency Law and Regulations, which was published and announced in media yesterday, will come into effect on 13 June 2019.

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